April 26, 2011 / 6:55 AM / 6 years ago

UPDATE 1-Ithaca Energy ups reserve estimates, farms out North Sea asset

* Farms out 31 pct stake in Hurricane prospect to CMI

* Net 2P reserves up 10 pct to 46.1 mmboe

* Says to continue scouting for asset acquisitions

April 26 (Reuters) - British oil explorer Ithaca Energy raised reserves estimates for its North Sea operations, driven mainly by its acquisition of gas fields in the North Sea last year, and said it would continue to scout for asset acquisitions.

Separately, Ithaca agreed to farm out a 31 percent stake in its Hurricane oil field in the North Sea to Challenger Minerals Ltd (CMI). CMI will pay a share of drilling and exploration costs in exchange for the interest.

In March, Ithaca’s CEO Iain McKendrick told Reuters that the company was in talks with several parties regarding asset acquisitions in the North Sea, adding that the recent tax hike could create opportunities for the firm. [ID:nLDE72S1ZM]

The British government recently raised a supplementary tax on North Sea oil and gas output to 32 percent from 20 percent. The tax raise brings the effective tax rate on production from UK fields to at least 62 percent and to as much as 81 percent for some of the oldest.[ID:nLDE72M1PB]

Net proved and probable reserves rose about 10 percent to 46.1 million barrels of oil equivalent (mmboe).

January-December pretax profit was $38.0 million, compared with $7.9 million a year ago.

Revenue rose 31 percent to $132.4 million, driven mainly by higher oil output. Oil production climbed 11 percent to 4,485 barrels of oil per day.

Ithaca’s shares, which have lost about 8 percent in value since the tax raise was announced, closed at 155.25 pence on Thursday on the London Stock Exchange, valuing the business at about $669.7 million. (Reporting by Anirban Sen in Bangalore; Editing by Prem Udayabhanu) (anirban.sen@thomsonreuters.com; within UK +44 207 542 7717; outside UK +91 80 4135 5800; Reuters Messaging: anirban.sen.thomsonreuters.com@reuters.net)

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